Lisa takes a loan of $10,500 at a 9% simple interest rate for 7 years.
How much interest will she pay after 3 years?
How much interest will she pay in total for the loan?
A. $2,835.00; $6,615.00
B. $8,280.00; $9,720.00
C. $13,598.00; $19,194.00
D. $28,350.00; $66,150.00
The formula for simple interest is: I = PRT, where I is the interest, P is the principal (the amount borrowed), R is the interest rate as a decimal, and T is the time in years.
For the first question, Lisa will pay interest for 3 years. Using the formula, we get:
I = PRT = 10,500 x 0.09 x 3 = $2,835.00
So the answer is A.
For the second question, Lisa will pay interest for the entire 7 years. Using the same formula, we get:
I = PRT = 10,500 x 0.09 x 7 = $6,615.00
So the total interest she will pay is the same as the interest for 3 years plus the interest for 4 more years:
$2,835.00 + $6,615.00 = $9,450.00
So the answer is not listed.